vision2020@moscow.com: More Stores Spurn Malls For the Village Square
More Stores Spurn Malls For the Village Square
Joel Hamilton (hamilton@uidaho.edu)
Mon, 19 Feb 1996 09:39:08 -0800 (PST)
>From: J.Massengale@eworld.com
>Date: Sat, 17 Feb 1996 19:40:27 -0800
>To: cd4urban@u.washington.edu, built-environment@mailbase.ac.uk,
> ecocity@searn.sunet.se, ruraldev@ksuvm.ksu.edu,
> sustainable-development@civic.net
>Subject: More Stores Spurn Malls For the Village Square
>Sender: sustainable-development-approval@civic.net
>Reply-To: sustainable-development@civic.net
>
>By Mitchell Pacelle, Staff Reporter of the Wall Street Journal
>
>National retailers are setting up shop in a place they long have neglected:
>Main Street.
>
>Led by national chains like Talbots Inc. and Gap Inc., more stores have begun
>bringing their merchandise closer to their best customers in affluent suburbs
>like Westport, Conn, Arlington, Va., and Brookline, Mass. They've discovered
>that these days, many shoppers would rather navigate their own village
>centers than the sprawling parking lots of regional malls.
>
>Real-estate investors like Steven Guttman are helping speed retailers' move.
>His Federal Realty Investment Trust, based in Bethesda, Md., for the past
>year has been buying stores on the main drags of such affluent suburbs.
>"Customers are getting tired of malls," he says. "People want to be outside.
>There's entertainment value to being outside on the street on a nice day."
>
>Downtown Westport, for example, is now home to Gap and its Banana Republic
>arm, J. Crew, Talbots, Ann Taylor and Barneys, Wellesley, Mass., boasts Gap,
>Ann Taylor, Talbots, Sam Goody, the Body Shop, and Starbucks. A host of other
>retailers are also opening street locations, ranging from Liz Claiborne, Inc.
>and Nine West Group Inc. to Williams-Sonoma Inc. and its Pottery Barn unit to
>Borders Group Inc.
>
>There are a lot of great streets that are evolving," says Gary Friedman,
>executive vice president of Williams-Sonoma, "We're going through a time I
>refer to as the de-malling of America."
>
>No one, however, expects such retailers to forge beyond suburbia into the
>thousands or rural towns across the nation with empty storefronts. There
>isn't enough business there.
>
>"We've never wanted to buy private properties in little towns," Mr. Guttman
>points out. Rather, by studying successful downtown retailing in towns like
>Wellesley, Princeton, N.J., Santa Monica, Calif., and Winter Park, Fla., he
>concluded that the best downtown retailing streets are usually located in
>densely populated, affluent areas. In addition, most are one-way, offer on
>street parking and are shaded by mature trees.
>
>Advocates of preservation say there are downsides to the arrival of chains in
>such towns. "A chain store is generally not going to have as positive an
>economic return to the community as a locally owned business," because
>chains' profits don't necessarily stay in town, says Kennedy Smith, director
>of the National Main Street Center, an arm of the National Trust for Historic
>Preservation. Some small-town residents worry that the arrival of national
>retailers will make it more difficult for homegrown merchants to survive amid
>competition and rising rents, and that the small-town atmosphere will be
>eroded.
>
>But many others are pleased that the new arrivals are helping to reverse the
>long, steady decline of downtown retailing. "People are eager for the 'Leave
>It To Beaver' days," says Mark Decker, executive director of the National
>Association of Real Estate Investment Trusts. "They want Main Street to be a
>place that's revitalized."
>
>For national retailers, the economics of moving out of the mall can be
>compelling. Retailers on Main Street don't share costs for common indoor
>space, and generally don't pay for parking, street lights or snow removal
>either. "A village store might not do as much volume, but it doesn't need
>to," says Arnold Zetcher, president and chief executive of Talbots, a
>women's-apparel retailer that pioneered street retailing in the suburbs. Only
>one-third of Talbots's 460 stores are in malls. "We believe we can control
>our costs better," says John Doub, chief executive officer of the Market
>Collection Inc., a Marblehead, Mass., company that runs Irresistibles, a
>chain of 14 women's apparel stores. "You turn the lights off, and your light
>bills go down."
>
>The opportunities for real-estate investors are numerous. "When we went to
>Westport, my first thought was: Let's own this whole town," says Mr. Guttman.
>Instead, he paid $9.5 million for buildings leased by Spiegel Inc.'s Eddie
>Bauer and Barney's Inc.
>
>Over the past 18 months, Federal has spent another $92.9 million for
>storefront properties in Greenwich and West Hartford, Conn.; Brookline,
>Mass.; Westfield, N.J.; Evanston, Ill.; Bethesda; Arlington; and Washington,
>D.C. Mr. Guttman intends to spend as much as $100 million in the coming year,
>and is studying markets like Winter Park, Santa Monica, and Philadelphia's
>Chestnut Hill and its Main Line suburbs. On streets already established as
>strong retail locations, Mr. Guttman says he is comfortable buying individual
>properties. On Greenwich Avenue in Greenwich, for example, Federal paid $12
>million for an aging Woolworth's, then leased the space to Saks Fifth Avenue,
>a unit of Investcorp, which plans to refurbish it.
>
>And where no Main Street exists, he'll help bring one to life. "If it doesn't
>exist as a great street, we need to buy the whole thing," he explained on a
>recent tour of several blocks of downtown Bethesda, that the company acquired
>for $18.8 million. By tearing down some buildings and remodeling others, he
>says, he intends to "create a new downtown" to be anchored by Barnes & Noble
>Inc. "You have to be careful not to make it look like a shopping center. You
>can't make it look too uniform," he adds.
>
>Competitors admit that Federal Realty may be on to something, although it may
>take years to see whether their new investments will pay off. "I think it's a
>very good idea," says Milton Cooper, chairman and chief executive of Kimco
>Realty Corp., which owns about 140 shopping centers. "He's got a jump on it."
>
>
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